Leading CEO asks: Do we dare protect national security on a shoestring?

. ‘Do we dare?’ The problem with the question, ‘do we dare’, is that it suggests we have no choices. This assumption is wrong. A number of months ago, former chairman of the Joint Chiefs of Staff, Adm. Mike Mullen observed that one of the greatest threats to national security is our national debt. It’s stating the obvious to note that, as a country, we must get our fiscal house in order. Doing so will require smart sacrifices and hard choices by everyone, including those in government and industry who are entrusted with our national security. What we are not hearing enough about from anyone is how we meet our national security goals and address our financial and budgetary crisis at the same time. We all have to change our behavior and we must embrace the change – not fight it. We must think and act at the national level – not at the parochial levels of interest group self-interest where we seem to dwell. Recently, the Secretary of Defense Leon Panetta informed Congress that restoring funds to unnecessary programs will hurt national security by denying proper funding for the programs that are essential today and in the future. We must listen. The government, by its own admission, has not managed previous defense budget downturns well. Past efforts have led to a hollowing out of our armed forces and overall capabilities. In the past, we navigated downturns in times of relative global stability. Today, we are navigating a downturn in a time of relative global volatility. Simply put, we can’t afford to get national security wrong. I would like to suggest three points that must be part of the necessary conversation of how to accomplish our shared goal of national security within an austere budget environment, and to try to get away from a discussion that is fast becoming nothing more than irresponsible grandstanding. First, the government must stop racing to the lowest cost, regardless of risk, capability or mission importance. Remember the classic children’s story of the three little pigs? Each little pig chooses to build a house out of different materials, with different consequences. We tell this story to our kids to make the point that it’s important to do things right the first time and to beware of the consequences of taking shortcuts. Today’s race to the lowest cost makes sense on the surface. After all, why pay more than you seemingly have to? But, in many instances, it’s like building our national security house out of straw. By defining value as the lowest upfront cost without adequate regard for other factors, we risk building on the wrong foundation, bearing unnecessary risk, and, in time, incurring a much higher cost, through budget overruns, delivery delays and, in the worst cases, failure. I am not suggesting that the government shouldn’t seek to buy at the best price and value, but the best value accounts for all the costs over time, as well as the objectives of the mission. Think about what you do as an individual: It is one thing to buy the cheapest generic drug to treat a cold, but when it comes to open-heart surgery, you act differently. Investing in our national security is our country’s open-heart surgery. We need to understand what is at stake before we buy, or cut. Which leads me to my second point. There is a growing tendency to think of only using the private sector to provide staff augmentation where government resources are insufficient. This, too, is a mistake. The private sector is far more than a supply of temporary labor, for at least two reasons. First, our country’s institutional knowledge of national security programs and systems resides across government and the private sector. We’re in it together. Second, innovation and the application of new technologies come from the private sector. Treating the private sector as nothing more than a low-cost provider of staff augmentation shuts out American experience and innovation. The government should articulate what it needs to accomplish, what it is prepared to pay for, and then let the private sector figure out how to deliver it. Think of it this way: Do you buy a car based on the cost of the steering wheel and the engine and the wages of the assembly-line workers? No. You buy a car that performs to your criteria and which is at a price you consider fair and affordable. Similarly, the government acquisition process should move away from its current obsession with the cost of component inputs, and shift its focus to desired outputs such as performance and affordability. By doing so, we re-open the door to private sector experience, innovation and ingenuity, and allow companies to bring their institutional knowledge to bear rather than simply contribute their individual employees on a scheduled basis. Third, it is increasingly recognized in both government and industry circles that we need deeper systems engineering. Good systems engineering is the architect you hire before you build a house. The architect helps you make the tradeoffs so that you get what you need, when you need it, and within a budget you can afford. Unfortunately, over the past decade, we have built a few too many houses without architects. Just consider the development of the F-35 Lightning II. As reported recently in the Washington Post, the fighter is almost three years late and has run $8 billion over budget. Systems engineering is usually associated with the construction of a program or system. In today’s age of fiscal austerity, systems engineering can help us with deconstruction – that is, making the right tradeoffs to scale back programs and systems without sacrificing mission readiness, mission sustainability and overall mission goals. As a country, we face major challenges on multiple fronts -- challenges for which solutions will come in conflict with each other and which will test our collective willingness to execute our responsibilities as citizens in a democracy, and perhaps more pointedly, as government and business leaders. Pulling it all together, doing ‘more with less’ – or doing ‘more with no more’ – while not ignoring our national security responsibilities – requires knowledge, intelligence and courage. It is time for us to embrace the changes we know we need to make and put aside our self-serving, parochial interests. And, we must rethink how we engage the private sector in order to unleash the innovation and brain power that have defined our country for more than 200 years.